VLADIMIR PUTIN
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OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN

Working Day

22 september, 2008 15:30

Prime Minister Vladimir Putin chaired the meeting of the Government’s Presidium

Prime Minister Vladimir Putin chaired the meeting of the Government’s Presidium
"I believe the country's financial authorities have reacted promptly to the situation in the global economy and taken measures that have definitely proved effective. The situation on the market has stabilised, as you know. In fact, the market has fully rehabilitated."
Vladimir Putin
Meeting of the Government’s Presidium
Minutes of the opening part of the meeting:

Vladimir Putin: Good afternoon, colleagues.

Much has been said of late about the financial problems of the West. You know that the Russian Government and the Central Bank of Russia have adopted a block of measures to ensure Russia's economic stability.

Considerable funds have been allocated to stabilise Russia's financial institutions, and a package of tax innovations has been formulated to continue to stimulate the economy. We have discussed this often, so I am not going to do it again. I will only provide assessment of our achievements.

I believe the country's financial authorities have reacted promptly to the situation in the global economy and taken measures that have definitely proved effective. The situation on the market has stabilised, as you know. In fact, the market has fully rehabilitated. However, we should carefully monitor developments on it.

This reminds me of past debates, when we were told we do not need such huge reserves. This is why we need them - to feel secure.

Some countries, including in Europe, reacted rather calmly, almost as calmly as we in Russia did, to the (negative) events in the American economy. I know it, as I had a chance to talk with Russian, European and American businessmen during the investment forum in Sochi. Those who diversify possible risks - and there are always risks - feel secure.

I repeat that all responsible departments should continue to monitor the situation.

I think the additional measures drafted by the Government and the Central Bank will help us to feel more secure. They include the permit for all banks with a high rating to accept the treasury's deposits for three months.

The first trading session has been held today. As much as 600 billion roubles have been offered for sale. It is a positive sign that only 330 billion roubles, or barely a half, have been bought. They say money is never enough, no matter how much you have. It turns out that those who can count money, who do this professionally, do not need excessive funds either.

By the way, stable decline has been registered on the market of the Central Bank's short-term repo loans. The bank is offering more money on the market than financial institutions need. This is the first measure.

The second important measure is the postponement of quarterly VAT payments by three months beginning in October this year. In fact, we are reviving the old system, making the scheme of VAT payments more comfortable for financial institutions. I think this is an important measure. It is not a revolutionary measure. If the banks need the care and attention of the Government, this is exactly what we are offering them.

We have agreed to help the Agency for Housing Mortgage Lending by increasing its authorised capital by 60 billion roubles. We should do this anyway, whether there are problems in the global economy or not; we need to develop the mortgage system, and the Agency has long asked us to increase its authorised capital. We should do this along with appropriating the planned 250 billion roubles to make market operation more effective.

Western economists, including in the US and Europe, are now speaking more and more often about the need for state regulation of the financial market. I don't know if we need such regulation, but definitely need to carefully monitor global processes.

I have a question for Mr Kudrin in this connection: when can you submit to the State Duma proposals for relevant amendments of legislation?

Alexei Kudrin: Mr Putin, the proposal regarding the postponement of quarterly VAT tax payments by three months will be submitted today. We will appeal to the deputies to vote for this law and submit the proposal very quickly.

As for amendments to the law on the 2008 budget, we will submit the proposal to the Government on October 1 and to the State Duma immediately afterwards. Proposals on amending the 2008 budget, which provide for allocating funds to support the market, will be submitted in time for the hearing of the three-year budget, also in October. So, these decisions will be formalised in legislation.

Putin: Good. I want to tell you and all the other colleagues that we cannot use, and there are no reasons for using reserve funds for implementing this package. We can take the necessary money from current revenues. This is what I want you to remember.

Besides, you mentioned the initiatives and joint work with parliament members. Some deputies of the State Duma have proposed raising the size of guarantees on deposits insured by the Deposit Insurance Agency. We need to discuss this. I ask you to discuss the issue with the Central Bank and the State Duma.

The Central Bank has also proposed a set of measures. I have just talked with the bank's chairman. I think its measures are reasonable and balanced, and they will allow the whole, I repeat, the whole financial system of the country to continue working in a stable regime. All these questions are definitely important, but I think we must not forget about current and future tasks we are going to formulate.

In the near future, we will consider and approve strategic policy documents - the concept of Russia's long-term development and the guidelines for the work of the Government. After that we will need to work calmly, in a businesslike manner to ensure their implementation. I think this is what the people and business expect the Government to do.

Before going over to the current agenda, I would like to ask some colleagues about the results of their work. Igor Sechin was in Cuba, Venezuela and Nicaragua. Will you report on your work there, on the meetings you had with these countries' leaders?

Igor Sechin: Mr Putin, in accordance with instructions I have made a working visit to several Latin American countries on September 15-17. During that tour, I first visited Cuba, where I discussed with President of the Council of State Raul Castro and Carlos Laje, Executive Secretary of the Council of Ministers, the contribution of Russian departments and companies to the efforts to clear up the consequences of natural disaster. I am referring above all to reconstruction of the damaged regions and food deliveries.

Experts from the Russian departments concerned are currently working in Cuba to assess the damage and prepare proposals on the supply of requisite equipment there.

Next I went to Venezuela, where I held talks with President Hugo Chavez attended by representatives of ministries and heads of companies to discuss the cooperation avenues and projects ahead of the October meeting of the intergovernmental commission. We discussed prospects for implementing projects in energy, mining, automobile manufacturing, shipbuilding, banking, investment, finance, education and agriculture.

It appears that the energy sector should be the driver of our cooperation with Venezuela. At the initiative of Russian companies involved in mining projects in that part of the world, we may set up a consortium for working in Venezuela and other regional countries.

Besides, we also discussed preparations for a visit of President Chavez to Russia.

At the third stage I went to Nicaragua, where we started working, at your instructions, on ways to invigorate trade and economic cooperation. I met with President Daniel Ortega and other colleagues to discuss cooperation prospects. I would like to report on this issue additionally.

Putin: Good, do that. Ms Golikova, the law on co-financing pensions accruals comes into force on October 1. Are we ready for this?

Tatyana Golikova: Yes, the law will come into force on October 1, 2008. The people will be able to independently make decisions on voluntary pension accruals. From October 1, they may submit requests to their employers or to their branches of the Pension Fund for the right to voluntary pension accruals.

They can do this between October 1, 2008 and October 1, 2013. For those who join the voluntary pension accruals system in this period, the Government will co-finance their contributions with money from the National Welfare Fund for ten years.

The transfer of money to the people's accumulation accounts will begin in January 2009. Minimum payment the people must make to have state co-financing is 2,000 roubles a year. Maximum co-financing by the state is 12,000 roubles. State co-financing for those who have worked the required number of years to get an old-age pension but continue working will be 48,000 roubles.

Besides, the law not only allows citizens to participate in the voluntary pension accrual system, but also encourages employers to do so if they are ready to make voluntary payments on behalf of their employees.

The Pension Fund is ready to start acting in this direction on October 1. We have thoroughly considered the technology of accepting and processing people's requests and are convinced that this mechanism can work without fail.

Putin: Good. Mr Zhukov, we promised that all disabled persons in Russia would be issued a car or monetary compensation in 2008-2009. What have we done to attain this goal?

Alexander Zhukov: Mr Putin, you are quite right. In accordance with presidential decree, the Government has settled all issues related to issuing cars or monetary compensations to disabled persons. A relevant amendment to the 2008 budget stipulates the allocation of over 4.5 billion roubles for this purpose. The draft federal law on the budgets for 2009, 2010 and 2011 also provides for the appropriation of over 5.5 billion roubles towards this goal. Besides, the Government has approved the procedure for issuing cars or monetary compensation to disabled persons.

In 2008, we are to issue cars or a compensation of 100,000 roubles to invalids of the Great Patriotic War and other wars, persons who fought in the Great Patriotic War but were disabled by diseases, professional injuries or other reasons, disabled persons who as minors had been inmates of concentration camps, ghettoes, and other places of forced detainment. In fact, we are to do this for all invalids of the Great Patriotic War and the other groups I mentioned above registered in social insurance departments as of January 1, 2005. This is approximately 30,000 people. So, we will fulfil this task in 2008.

In 2009, cars will be issued to persons disabled by the radiation disease they contracted in Chernobyl and disabled persons from the category of rehabilitated citizens, in all approximately 2,000 people.

Besides, compensations will also be paid to those citizens who expressed a desire to receive 100,000 roubles instead of a car, persons disabled by diseases (who cannot issue cars) and disabled children and persons disabled since childhood. This is approximately 52,000 people registered as of January 1, 2005.

Cars are to be issued to disabled persons through organisations that supply them under state contracts signed between them and the Ministry of Health and Social Development.

Compensations will be paid through social insurance bodies; at the written request from disabled persons, money will be transferred to their personal accounts in banks.

According to the Ministry of Health and Social Development, an auction for the supply of cars was announced on September 19 and the issue of cars will likely start on November 20.

Putin: What cars are we buying for the people?

Golikova: It depends on the results of the tender.

Zhukov: Yes, but it will be quality cars.

Putin: Not ZAZ-968M?

Golikova: No. You know that VAZ was the car supplier before May 9, and it did well. All its dealerships in the regions worked quite well, in principle, without malfunctioning. But this time the winner will be determined at the auction.

Putin: I see. Thank you very much. Please monitor the process to rule out malfunctions. We must fulfil our promises. It is not difficult to do; you only need to streamline the process because the funds have long been allocated, and so there should be no problems.

Mr Ivanov, I asked you to consider setting up a Council of General Designers under the Prime Minister. So my first question is, how far have we advanced? And second, a meeting of the Commission on High Technologies is to meet soon. What will it discuss?

Sergei Ivanov: Can I start with the second question? We will hold a routine meeting of the Governmental Commission on High Technologies and Innovations tomorrow. It is a new commission; it was set up in summer after the administrative reform of the Government.

It will consider two issues tomorrow: drafting legislation for promoting the development of nanotechnologies, and developing high biomedical technologies, which I think could be more important than the former issue.

Speaking of nanotechnologies, the Government has already made organisational and financial decisions designed to boost the development of this crucial sector, whereas we are only at the start of a long road regarding biomedical technologies.

Last week I visited the Russian Research Centre named after Academician Petrovsky and talked with professors of the Russian Academy of Medical Sciences. Every one of them told me that the discovery of stem cells and the first operations they have made open the door to new innovative spheres of medicine.

The Government commission should above all discuss the development of legislation on stem cells and biomedicine. We don't have such legislation now, and so the Government should address this task as a priority.

As for the first question, I am sure I will be able to submit by the end of the month proposals on setting up a council of general, or chief, designers in innovation sectors under the Prime Minister, drafted in accordance with your instructions. Requests have been sent to all ministries and departments concerned.

I believe that this council should above all include experts on nano, bio and information technologies, aircraft manufacturing and shipbuilding, missile and space technologies, nuclear power generation, new materials, and petro- and gas chemistry, which are boosting deeper conversion of raw materials and creation of alternative energy sources.

It is primarily from these sectors that we should choose chief and general designers and specialists for the council.

Putin: Good, thank you. When can we do this?

Ivanov: I will submit written proposals on the members of the council by the end of the month.

Putin: Good, thank you very much. Mr Gordeyev, you have been to Poland, where you met with colleagues from East European countries. Did your discussion go well? What have you agreed? This is my first question. My second question directly concerns your responsibilities: what are the interim results of the harvesting campaign?

Alexei Gordeyev: I visited Poland at your instructions, where I attended Polagro, a major agricultural exhibition first held during the era of the Council for Mutual Economic Assistance. They are holding it again.

A meeting of leaders of East European countries' agrarian ministries was held during the exhibition. They discussed development of their agricultures and harmonisation of the agrarian policies of Europe and Russia. You have raised these issues more than once.

I also had a separate meeting with the Polish Minister of Agriculture, which passed off in a very warm atmosphere free of political considerations.

The meeting with representatives of the Polish agribusinesses showed that the current goal is not just to trade but also to develop joint investment projects, revive our interaction in the sphere of the agrarian science, and exchange specialists.

We have agreed to hold such meetings annually and also to set up a special permanent working group on agriculture at the Russian-Polish intergovernmental commission.

On the whole, the meeting showed that there are no acute problems hindering mutual understanding.

As for your second question, the harvesting campaign is entering its final phase. We have harvested crops from 82% of sown areas, 38 million hectares, gathering in 98.5 million metric tons of grain and legumes, which is 19.5 million metric tons more than last year, although last year's harvest was a good one.

This year's yield is 2,590 kg per hectare, a record high figure in the country's history and approximately 20% higher than last year. We expect to gather in approximately 95-100 million metric tons of grain in net weight. In this sense, there are reasons to expect a tranquil situation on the national food market.

The maize harvest is also good, with a record figure of over 5 million metric tons. In Soviet times, we harvested 4 million metric tons of maize at the most. The harvests of rice, sunflower seed oil and other crops are also good.

The harvesting campaign has now moved almost entirely to Siberia. Unfortunately, the weather was not very accommodating, but the forecast for the remaining part of the week is considerably better and we hope to complete the harvesting campaign by early October.

On October 11 we will sum up the fulfilment of this year's agricultural tasks. The procedure will take place at the Russian Exhibition Centre, formerly VDNKh, where all regions will be represented. Mr Putin, we invite you to attend this major event.

We have formulated the task of sowing winter crops. Just to remind you, winter crops account for about 40% of the harvest. We are proceeding at a high pace and plan to sow 10% more winter crops than last year, on an area of some 17 million hectares. It will be a good start in terms of volume and quality of the crops, mostly food grain.

This is all.

Putin: Mr Kudrin, I have considered the request of the Defence Ministry regarding the restoration of our potential, compensation of the losses we sustained during the hostilities in the Caucasus. The request is quite substantiated, and the Military Industrial Commission has also discussed it. So, let us calmly work to attain the goals we have discussed before.

Now for the agenda of today's meeting. The first issue is the establishment of a governmental commission on promoting power generation.

It will be put in charge of implementing the master plan of placing power generating facilities in the period until 2020 and coordinating investment plans of the state and project participants.

The commission will consider ways of simplifying the connection of new facilities to electricity grids, the tariff policy and other issues.

Deputy Prime Minister Igor Sechin will chair the commission.

We shall also consider several international treaties and agreements, including the agreement signed within the Council of Europe and the Shanghai Cooperation Organisation on combating terrorism and organised crime, as well as the draft agreement with South Korea on a simplified procedure for the issue of visas for short-term visits by Russian and South Korean citizens. This is our contribution to maximally simplifying visa formalities for our people. In the future, we would like to have a visa free regime with a majority of partner countries.

Let's start the discussion. Energy Minister Sergei Shmatko has the floor.